Rising service costs mean higher city utility rates
September 7, 2014
Area residential utility rate comparisons
(Base per month)
Glenwood Springs $13.17
New Castle $27.75
Glenwood Springs $62.45
Aspen Sanitation District $20.26
New Castle $46.12
Electric (500 kilowatt hours)
Glenwood Springs $50.61
Holy Cross Energy $54.16
Public Service Co. (Xcel Energy) $58.78
Source: City of Glenwood Springs Public Works Department
GLENWOOD SPRINGS — Glenwood Springs residential utility customers will pay about $16 more per month, on average, for the use of city water, sewer and electric combined, following the second utility rate increase this summer passed along by the city to make up for increasing service costs.
"No one wants to raise rates, but it is a necessity," said Robin Millyard, Glenwood Springs Public Works director, at the Thursday night City Council meeting. "We do try to operate all of our utilities to the customer's advantage.
"But we do have costs, and those costs continue to rise," he said.
Council approved the recommended 10 percent increase in water rates and a 7 percent rate hike for wastewater (sewer) services. Both rate increases will be effective with the October billing.
It's the first sewer rate hike the city has had to impose since 2011, and the first increase in water rates since 2012.
The rate adjustments are necessary to meet revenue requirements for the remainder of this year and into next year, according to a recent cost-of-service and rate analysis the city had done by an outside consultant.
That report also suggests annual water/sewer rate increases of anywhere from 4 percent to 10 percent will be necessary for the next six years.
The new rates for this year will translate to an average monthly increase for residential customers of $3.92 for water, and $4.58 for sewer services.
The water and wastewater rate increases come on the heals of a 12 percent hike in electric utility rates approved by City Council in July, resulting in an average residential electric utility bill increase of $7.18 per month.
Together, the average city utility cost for residential customers has gone up $15.68 with the recent round of rate increases.
Still, the cost to Glenwood Springs water users, at a base rate of $13.17 now per month, remains lower than most other area municipalities, according to the service/rate analysis and rate comparisons maintained by public works officials.
Town of Carbondale water, by comparison, costs $17.35 per month for in-city users, followed by Rifle at $25.20, New Castle at $27.75 and Silt at $36.49.
"The cost of water treatment can be radically different between different communities, depending on their source," Millyard explained.
Electric utility rates are increasing across the country, resulting in rate hikes from other municipal utilities, member-owned cooperatives and private providers, he also said.
Even so, Glenwood's electric rates remain below the two other area providers, Holy Cross Energy and Xcel Energy.
Glenwood sewer rates, on the other hand, at a base rate of $62.45 per month, remain significantly higher than other area towns, partly because the city is still working to pay off the new wastewater treatment plant.
The city is currently subsidizing the cost to pay off the debt for construction of the new plant by transferring about $800,000 annually from its capital projects fund.
If the city were to discontinue that practice, a customer rate hike of more than 50 percent would be needed in order to cover costs, City Councilman Mike Gamba noted.
"We're all just trying to absorb this, because it is a large increase," Mayor Leo McKinney said, adding that the city can't sacrifice other needs by increasing subsidies for public utilities.
City sewer rates rose anywhere from 20 to 30 percent per year from 2006 through 2011 when the new treatment plant was under construction. Customers were given a break in 2012 and 2013 when no rate adjustments were made.
One benefit of the new plant, Millyard said, is that it's much more efficient than the old sewer plant, meaning the city is seeing savings in its own utility costs.
No members of the public showed up at Thursday night's meeting to comment on the water and wastewater rates that were approved.